XLF Update

Yesterday we saw an open volume melt up, which is a sure sign of manipulation and it came just as the story about the Judge who decided MERS was not a legal way of transferring mortgages saying:

“Merscorp Inc., operator of the electronic-registration system that contains about half of all U.S. home mortgages, has no right to transfer the mortgages under its membership rules, a judge said...U.S. Bankruptcy Judge Robert E. Grossman in Central Islip, New York,in a decision he said he knew would have a “significant impact,” wrote that the membership rules of the company’s Mortgage Electronic Registration Systems, or MERS,don’t make it an agent of the banks that own the mortgages..."

That's when we saw the open volume melt up to try to keep most of the market green. Here's XLF on its own.

 a daily wedge, we are seeing a lot of these recently.

 XLF 60 min wedge (bearish) looks like it may breakdown, but we know the volatility games so that would suggest we get a couple of moves down , up and down again as has been the norm.

 3C 60 min in a negative divergence

15 min 3C also negative.

It seems the MERS decision is a major stumbling block for the banks and anyone else golding the derivatives of such, like MBS. This could force a major putback if the decision is upheld and banks will have to significantly increase reserves.